Bosses blast Labor on arbitration

Employers have vowed to fight a Labor Party push to expand the scope for wage bargaining rounds to be decided through arbitration, saying it would encourage unions to hold out for higher pay and conditions.

Changes to the ALP platform passed over the weekend open the way for all workplace agreements to be required to include “last-resort" arbitration clauses, which would broaden the role of industrial umpire Fair Work Australia in settling workplace disputes.

“That would be a return to the bad old days where unions made ambit claims and waited for the indepen­dent umpire to come along and ­arbitrate those outcomes," Australian Industry Group industrial ­relations director
Stephen Smith
said.

Union leaders used their influence at Labor’s national conference to intensify criticism of big employers such as
Qantas
, which could be hurt by a unanimous change to the party policy aimed at curbing its ability to outsource operations overseas.

The party conference also backed new policies that encourage super­annuation funds to invest in more infrastructure and help local manufacturers get more work from the resources boom, while the government gained approval for policies on live cattle exports and the overseas processing of asylum seekers.

Prime Minister
Julia Gillard
prevailed in a fierce debate over uranium exports to gain a majority in favour of allowing shipments to India, subject to safeguards to be negotiated next year.

Workplace Relations Minister
Chris Evans
said the new workplace relations platform adopted at the conference reflected “the priorities of the labour movement" and that arbitration was a “live issue" for both employers and unions.

“You have seen an increased focus on how we resolve protracted disputes," Senator Evans told The Australian Financial Review. “People are looking at the role of Fair Work Australia, whether it has the powers to effectively resolve those things and whether it has the powers to ensure good faith bargaining occurs."

Related Quotes

Company Profile

He cited the Qantas dispute and the failure of bionic ear maker Cochlear to negotiate a collective agreement, despite the high-tech manufacturer’s workforce expressing support for it. Cochlear pays well above award rates but has not struck a collective deal with the Australian Manufacturing Workers Union.

Business is alarmed at the operation of the Fair Work Act. Westpac chairman
Ted Evans
claimed last week the industrial relations system was stalling productivity growth.

Senator Evans said employer representatives at the ALP conference were “unsurprised" about the changed workplace platform. “They were expecting it to be more contrary to their views than it was . . . they were not relieved, but some of them were pleasantly surprised," he said. “I’ve had both unions and employers approach me about whether greater access to arbitration in certain circumstances should be provided.

“Generally I find that people who are losing a dispute are very keen on arbitration. When they win a dispute they wouldn’t have a bar of it and we’ve seen that in the last little while."

At present, arbitration can be triggered only in major disputes such as Qantas and only where Fair Work Australia rules there is risk of harm to the public or damage to the national economy. FWA can also arbitrate a dispute if all parties agree and in the case of certain groups of low-paid workers who are deemed to have limited bargaining power.

But business has vowed to fight any move to compulsory arbitration. “ACCI will not support extending compulsory arbitration powers beyond minimum standards or where the economy is at real risk from a dispute," Australian Chamber of Commerce and Industry chief executive Peter Anderson said.

The chief executive of the Australian Mines and Metals Association,
Steve Knott
, said AMMA would “fiercely oppose" arbitration.

“People are getting all caught up about trying to go back to a ‘70s and ‘80s model that doesn’t work, which is: ambit claims, bargain on any matter, then send it to the umpire where basically the union says 10 per cent, the employer says 5, and the arbitration commission awards 7.5," he said.

“That model failed Australia."

Senator Evans argued the wording of the platform would not prejudice the conduct of Labor’s review of the Fair Work Act which has to be started by January and will examine evidence of whether the workplace laws were achieving their aims.

But the platform makes clear the ALP backs the introduction of last-resort arbitration to be included in dispute resolution clauses to “deal with those circumstances where such disputes cannot be resolved through discussion, conciliation or mediation".

This included requiring that “dispute resolution procedures in agreements provide for arbitration as the final stage where disputes cannot be resolved".

The ACTU argued that the new platform would extend the ability of workers to bargain over job security, a key sticking point in the Qantas ­dispute, although it also refers to balancing the “needs of business" with “creating and sustaining good, secure jobs".

ACTU secretary
Jeff Lawrence
said the government had not agreed to change the legal concept that enterprise bargaining could only cover “matters pertaining" to the employment relationship.

But the government “supports bargaining about job security" which raised questions about how the “matters pertaining" concept was applied in practice.

Fair Work Australia has upheld the legality of an industry-wide agreement covering Victorian electricians, which limits the use of contractors and requires employers to promote unionism, in the so-called ADJ case.

But the decision is under appeal by Ai Group and ACTU president
Ged Kearney
argued that the government supported the ability to bargain about job security.

“There’s huge push back from business," Ms Kearney said. “To say that should be their prerogative, that they shouldn’t have to debate, to agree on such things . . . Qantas is a classic case. Historically . . . Fair Work Australia or before that the Commission, hasn’t always ruled in favour of unions."

The new platform also says the ALP will “strengthen the laws which ­prohibit sham contracting", despite the Australian Building and Construction Commission recommending against major changes in a recent report.

The head of the CFMEU’s construction division, Dave Noonan, said the current law on sham contracting only applied when an employer recklessly and wilfully breached the law. His union would push for strict liability to be applied.